Top Questions to Ask a Prospective Property Manager: Part 2
You’ve asked your prospective property manager everything you need to know to believe that they’re going to treat your tenants with the proper mix of respect and authority. Now, it’s time to determine how they’re going to treat your property itself:
Do You Have Someone Available 24/7 For Emergencies?
If a tenant’s furnace breaks down in the middle of a street-closing blizzard, how are they going to respond? How quickly can they address the situation? If their solution is to move the tenant to a warmer temporary shelter, what will they do to protect the property from the cold, and how quickly can they get that done?
Do You Have Preferred Vendors?
Simple enough, if a PM and a vendor have a longstanding relationship, they also generally get better service, reduced costs, volume discounts, and other perks. In contrast, a PM that doesn’t have a list of preferred vendors (and isn’t brand new to the business) might be a royal pain in the hindquarters to work with, which is why the vendors don’t care to seek out their business a second time.
Do I Have to Use Your Preferred Vendors?
In contrast it’s good to know how flexible a PM is when it comes to using their vendors versus yours. There are pros and cons to each, which we won’t get into here, but at least you should know your options.
Do You Require Your Vendors to Add You as ‘Additional Insured’?
Vendors naturally have insurance that covers them in case something goes wrong with their products or services — but the PM who oversaw the vendors’ work can also be sued and found liable for a startling variety of situations. So it’s become common practice for a property manager to require their vendors to add them as a ‘additional insured’ on all policies, so that the PM has their own insurance and the vendors’ insurance policy to cover them in case of a disaster. (Look for a second important question about ‘additional insured’ status next week!)
How Will You Determine Market Price for My Rental?
There are as many ways to determine the price for a rental are there are landlords. Some PMs will pore over ads for similar homes in similar neighborhoods. Some will look up a few known sources and average them (i.e. Zillow, MLS, Trulia, and their own internal comparables). Some won’t be able to explain how they determine market price — run away from those PMs. “Divination” is not an acceptable form of property management.
How Will You Advertise My Rental? What Happens if it Doesn’t Rent?
Again, there are thousands of acceptable answers to this question, each with its own pros and cons. The important part here is that they do actually have a plan for advertising — and more importantly, a plan for how to respond when it doesn’t work. For example, if a PM uses an inexpensive two-prong approach of “Local print ads and Craigslist,” and the property doesn’t move within 3 months, how are they going to encourage it to move? The answer to this question can also be fairly different, but there are two answers you don’t want to hear. The first is “nothing,” for obvious reasons. The second is “we’ll start advertising in channels X, Y, and Z,” because seriously — why didn’t you just advertise in those channels in the first place? (The most common answer, and a perfectly good one, is “We’ll look at dropping the rent.”)
That’s it for the property-related interview questions for your prospective new PM! But there’s still one more set — and in some ways, it’s the most important: how will the property manager treat you? Come back next week for the details.
Image Courtesy of Polina Zimemrman